The European Commission announced on June 12 additional tariffs of up to 38.1% on electric vehicles (EVs) manufactured in the Chinese mainland, aiming to protect European industries and jobs. These tariffs, set to take effect by July, target leading Chinese EV manufacturers such as BYD, Geely, and SAIC with rates of 17.4%, 20%, and 38.1% respectively. Companies cooperating with the investigation will face a 21% tariff, while non-cooperating firms will incur the highest rate of 38.1%.
This move adds to the existing 10% levy on all car imports into the EU, further straining the already tense China-EU trade relationship. As one of the world's largest and most outward-oriented economies, the EU's decision threatens significant economic activity within the bloc.
China stands as the world's largest automobile market, and the EU's tariffs could lead to a substantial $3.8 billion drop in EV imports, accounting for nearly 25% of current trade values, according to a study by the Kiel Institute for the World Economy. This development not only challenges the EU's EV sector, which is already facing declining domestic demand, but also hampers broader China-EU trade relations.
Since joining the World Trade Organization (WTO) in 2001, China-EU trade has flourished, supporting growth across various industries and fostering job creation. Currently, the two account for over a third of global GDP and are among the largest trading partners worldwide, exchanging goods worth over $800 billion annually.
Telecom equipment remains China's leading export to the EU, while the bloc's top exports to China are automobiles. Access to China's expansive EV market is crucial for EU enterprises, driving innovation and enhancing product quality through healthy competition.
However, the EU's recent tariffs, mirroring similar measures by the U.S., pose a threat to the competitiveness of EU enterprises in the global EV market. While intended to protect local industries and jobs in the short term, these protectionist measures may undermine the long-term competitiveness of the EU's EV sector.
Reference(s):
cgtn.com
